The majority of transactions currently utilize banks. However, in the future this could change as blockchain technology further develops allowing people to complete peer to peer transactions more often. Predictions are being made that a blockchain economy could outperform a web economy in years to come. Learn more about this speculation in the article from Computer Weekly below.

According to Mougayar, money is one area the web has not tackled in a “native” way, with most money transactions still going through banks rather than being peer to peer (P2P) in nature.

“The banks have led us to believe that we still need them, but in reality they are just updating each other’s ledgers,” he said, pointing out that this is what blockchain technology enables, but without the need for a third party such as a bank.

The best-known application of blockchain technology is bitcoin, which Mougayar said “at its core” is really about P2P transmission of value, with cryptology being a critical component that secures both the stored data as well as securing and validating transactions.

Bitcoin and other cryptocurrencies, he believes, will become an increasingly popular way of transferring value, with up to 900 different cryptocurrencies available already.

Blockchain is also about new, emerging P2P infrastructure that is truly decentralised, said Mougayar, in contrast to many web-based applications such as Facebook that have not remained true to the original decentralised concept of the World Wide Web.

Blockchain, he said, provides a clear and quick way of getting transactions settled without involving a third party. “If you were to dumb it down, the blockchain is a just series of API [application program interface] calls to verify something – a settlement, an identity. But because it is immutable and each transaction just adds to what has gone before, transaction history remains intact. It is an excellent record-keeping technology,” he said.

Cryptocurrencies go beyond money use

Cryptocurrencies, said Mougayar, are not just about money. “They can represent a function, work and attention, which means new companies publishing user content could compensate users by enabling them to earn tokens for giving attention to content or attracting attention to content.

“This means users could earn cryptocurrency that can be exchanged for goods and services, which is already being implemented by companies such as Steemit, where everyone gets paid for creating and curating content,” he said.

Most of what has been happening around blockchain has been about the development of the core, which has been a largely “technical story,” said Mougayar.

“A lot of the activity is very technical, about the nuts and bolts of the infrastructure, but we are now going to get more into the app development and the story is going to be more about the applications, which is how the web started. First we had to get the infrastructure and the standards, and then the applications came,” he said.

Developers should prepare for ‘inevitable’ blockchain change

Mougayar urged organisations to encourage their developers to learn blockchain languages in preparation for the changes that he sees as inevitable.

“The fact that there currently around 10 million Java developers in the world and only 30,000 blockchain developers tells you were we are and where we need to be,” he said.

Standards are very important in the era of technology, said Mougayar, and although there are only few blockchain-standards, the ERC20 standard for issuing tokens or cryptocurrency is an important one because it is the main reason so many ICOs and cryptocurrencies exist. “When you put standards in the market, adoption skyrockets,” he said.

However, Mougayar cautioned against trying to regulate the blockchain prematurely for fear of stifling innovation around this technology. “Blockchain is just a baby right now. Let’s wait until it grows to be an adult, and then we can regulate it,” he said.

Going forward, he said, the blockchain is going to disrupt the database, a new type of virtual environment is going to emerge, there will be a new way of proving the identity of people and the ownership of value, and tokens and smart contracts will become the new language.

“We will enter the new blockchain economy in the same way that we entered the web economy 20 years ago,” said Mougayar.

Lately, Bitcoin has been progressing financially but not technologically. Many are debating why this is. The article below from CoinDesk goes into the speculation and thinks about what the future might be for Bitcoin. Investors may choose to remain optimistic or become a little more reserved. Read more about this below.

$1,700? Bitcoin’s Price is Up Even as its Tech Progress Stalls

Sometimes referred to as the ‘honey badger of money’ (after a famous viral video), bitcoin enthusiasts may find this comparison particularly apt of late. Since the beginning of the year, the network’s value has nearly doubled – even while the community continues to be mired in debate.

Market observers so far have offered a wide range of reasons for this uptick, though not all of them are good, with increasing prices causing concerns that the industry as a whole is entering a speculative bubble.

Supply and demand

Still, not everyone believes the boost is due to speculation.

Redwood City Ventures founder Sean Walsh, for example, sent CoinDesk a bullet-pointed email summarizing the various global developments that could be contributing to the bitcoin price surge. He believes developments in South Korea, Japan, Russia and China have all contributed.

The price surge, according to Walsh, is simply supply and demand.

“Bitcoin is dramatically more scarce than most people realize, especially in the context of its total addressable market of nearly 3 billion internet-connected adults,” he continued.

Walsh framed the situation simply as one where the cryptocurrency is seeing increased demand, which looks to only increase in the future:

“Once the global race to own bitcoin commences, the tiny supply of new bitcoins (just 54,000 new coins per month) will be completely overrun by demand,” he said, adding:

“There just aren’t anywhere near enough coins to go around, and pre-existing holders will grasp ever more tightly into this surging market, as perennially dictated by human nature.”

Tensions subsiding

Still, to those following day-to-day technical developments, it might seem odd that the digital currency’s price has seen such an upswing amid its scaling debate and a stalled upgrade known as SegWit.

Kristov Atlas, a security engineer at wallet and data firm Blockchain, for example, wasn’t able to find technical reasons for the uptick in demand.

He told CoinDesk

“I don’t see how the price increase could relate to tech changes; no big changes in long term projects like Lightning lately, and the block size stalemate is still status quo.”

“[It] must be something outside bitcoin that investors have changed their minds about,” he suggested.

While developers, admittedly, might not be experts on economic market conditions, those that have been in the industry for a while are perhaps more aware of how technical developments could contribute to bitcoin’s price.

When asked, some argued the state of the technology could have something to do with the recent increase, though, perhaps in surprising way.

For example, bitcoin’s block size debate took a weird turn a couple of months ago, when discussions about the possibility of forking bitcoin into two networks reappeared. This time around, some miners and developers suggested the idea of destroying the chain that didn’t follow along with the majority of hashing power.

This has yet to happen, though, and worries about such an event happening have since died down. Some wonder if this could have given the price boost.

“I think part of the rally is due to increased confidence that the risk of a contentious hard fork has all but evaporated,” Reddit moderator BashCo said.

Yet some expect to see a ‘correction’, where the price dips to a more reasonable place.

The emotion factor

The idea that raised tensions contribute to price swings fits with bitcoin developer and Nakamoto Institute director of research, Daniel Krawisz’s view that the price has more to do with emotions.

“The price of bitcoin never makes sense and it doesn’t have very much to do with the tech,” he said. “It’s about emotion. It’s about greed.”

Krawisz also sees the price more aligned with bitcoin’s original value proposition of giving users more control, rather than more granular tech additions or debates.

“It’s not the new features of bitcoin that matter. What matters are the old features. People keep moving into bitcoin because it’s a better alternative than their own national currency,” he said, adding:

Though, perhaps echoing other developer’s sentiments about a reduction in fear, Krawisz went on to argue that the increase in demand probably has to do with bitcoin’s apparent stability, since it’s been around for a long time compared with many cryptocurrencies.

“It’s the same reason that people always get into bitcoin now as ever,” he concluded.